Tuesday was a crazy day for activity in the financial sector with JP Morgans (JPM) early dividend reveal ahead of the Federal Reserve stress test announcement. Accordingly the financial sector saw some big increases in option call volume activity.
Financials - Calls:
US Bankcorp (USB) : + 500%
JP Morgan : +370%
Citigroup (C) : +291%
Bank of America (BAC) : +281%
Wells Fargo (WFC) : +276%
Goldman Sachs (GS) : +231%
Metlife (MET) : +218%
Financials - Puts:
Citigroup : +%240
Morgan Stanley (MS) : +381%
US Bankcorp : +273%
Wells Fargo : +280%
The Federal reserve applied the stress tests to nineteen banks and only four of them failed. The four were Citigroup, SunTrust (STI), Ally Financial (ALL.PRB), and MetLife. It's not surprising to see Citigroup among the high puts, we've known they were not as strong as JPM but they do have some promising outlooks given their moves into the Chinese financial realm. Tomorrow will give us a better idea of the market sentiment as many of these may have been made before JP Morgans reveal as a ramp up to the original date for the Fed announcement on Thursday.
JPM announced a 20% dividend increase, USB announced a 56% increase, and WFC announced it was nearly doubling its first quarter dividend. Citigroup and the other test failures will be unable to increase their dividend or buyback shares.
Notable activity for 3/13/12:
With the huge day for the markets most of the big activity happened on the call side. The markets are up, the U.S. Dollar is up, gold is down, and "John Carter" might not have been too terrible.
* = Gain > 3.0%
~ = Loss > 3.0%
Calls / Puts:
~Clean Energy Fuels Corp (CLNE) : +322% / +421%
~Majesco Entertainment (COOL) : +1511% / +647%
*Ebix Inc. (EBIX) : +325% / +481%
~Urban Outfitters (URBN): +308% / +540%
*LinkedIn (LNKD) : +205%
*Molycorp (MCP) : +229%
*HSBC Holdings (HBC) : +1849%
Powershares QQQ Trust (QQQ) : +234%
Proshares UltraShort +20yr Treasury (TBT) : +259%
Total S.A. (TOT) : +1596%
Powershares US Dollar Index Bullish (UUP) : +332%
*United States Steel Corp (X) : +209%
*Alcoa (AA) : +201%
Anadarko Petroleum (APC) : +223%
*Disney (DIS) : +230%
SPDR Gold Trust (GLD) : +252%
Cree Inc. (CREE) : +201%
Ingersoll-Rand (IR) : +391%
CLNE hit a previous resistance today around 18.70 but rebounded up to finish at 19.31 despite hitting a daily high of 20.80. This is after the three previous days of hitting a top resistance at 21.40. Next level down is 17.60 but it has spent the past few weeks darting between 18.70 and 21.00 so watch out for this one.
EBIX has been on a huge run from 21 to closing near 24. It was up about a point today after beating their earnings estimate (0.44 vs est. 0.39). Next resistance is 26.
URBN took a gap down on a missed earnings (0.27 vs est. 0.283) but finished the day at a previous low resistance of 28.
LNKD may have hit the top channel of an earlier gap fill, could be a good time if it breaks around 95.5. (Yeah I know, look at SHLD, crazier things have happened)
X had a big day and topped out at a previous resistance level near 28. If it can get past 29 we could see a move towards 32. AA is looking the same with an arrival at 10.30 looking to move past 10.50 to a hopeful 11.
APC was down on a dividend release, touched a previous low resistance around 82.5 but bounced back up to finish at 83.64. Wouldn't be surprised to see it get near 85 soon followed by a push up to 87.5.
IR just filled a gap after a rugged early March. Sitting at the 40.6 resistance level a shift past 41.32 would look great for a future shot at 43.5.
As this is the first installment this section will be sparse. In the future it will look back at the previous day to assess the winners and losers to see if we can figure out why that was.
Thanks for reading and I'll see you tomorrow.